When it comes to saving our money, we have choices. We can put it under the mattress, in the bank or we can invest it. The experts usually suggest a combination of the latter two (all will discourage the first option). Who are these experts? They are financial advisors whose job is to help their clients plan for their short and long-term financial goals. These goals may include retirement and education.
A financial advisor may provide investment, tax and insurance advice. While the primary part of his or her job is to advise people, he or she also spends a lot of time growing a client base. To do this, financial advisors must be skilled networkers.
Quick Facts About Financial Advisors
2021 Median Pay $94,170 per year $45.27 per hour
There are 218,100 personal financial advisors in the U.S., according to the Bureau of Labor Statistics. This means that there are 9.70 financial advisors for every 10,000 adults ages 25 and older.
Most work in the finance and insurance industry.
Financial advisors usually work full-time.
About a fifth are self-employed.
The U.S. Bureau of Labor Statistics (BLS) predicts job outlook will be much faster than the average for all occupations through 2024.
It is less stressful than other financial occupations
These typical job duties come from online ads for financial advisor positions found on Indeed.com:
- "Recommend investment products and services that are suitable for prospects and clients based on their objectives, resources, time horizon, risk profile and preferences"
- "Execute and negotiate follow through of implementation vehicles including insurance, investments, tax planning, debt management, estate planning and other tasks quoted to client"
- "Decide how to build your practice by choosing your clients and the markets you want to pursue"
- "Solicit clients actively via telephone, mail, referrals, etc."
- "Maintain proper documentation following preset guidelines established by compliance and management"
- "Comply with all industry rules and regulations"
- How to Become a Financial Advisor
To work as a financial advisor, you will need to earn, at least, a bachelor's degree. Majorsthat offer good preparation for this occupation include finance, economics or accounting. Earning an MBA (Master's of Business Administration) or a master's degree in finance could help you eventually advance into a management position.
If your job includes selling financial products such as stocks, bonds and insurance policies, you will need licenses to do so. See the Directory Of Securities Laws & Regulations on the North American Securities Administrators Association (NASAA) Web Site for licensing information. Financial advisors who manage their clients' investments must register with either the state or the U.S. Securities and Exchange Commission (SEC), depending on the size of the firm for which they work.
Many people who work in this field earn the Certified Financial Planner credential from the Certified Financial Planner Board of Standards. To do this, they must pass an exam after first earning a bachelor's degree and acquiring three years of experience in financial planning.
What Soft Skills Do You Need?
In addition to a degree and license, you also need certain soft skills, personal characteristics that you cannot learn through formal training, to succeed in this occupation. Here are the most important ones:
- Active Listening: You must be able to listen to and understand your clients' financial goals.
- Critical Thinking: To figure out how to help your clients meet their goals, you need to evaluate all the data available.
- Reading Comprehension: It is necessary to understand documents that describe various financial instruments.
- Verbal Communication: You must be able to clearly explain the financial services you can provide to potential clients.
- Service Orientation: A desire to help people plan for the futures is important.
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Mike Nekoorad, CFP® CLU®